The Privileges Committee Report

The report has just been released and is online here.

I will comment on it shortly once I have read it. It is 280 pages long.

By a majority vote, they have recommended Peters be censured by the House. I can not recall the last time an MP was censured.

The majority includes United Future’s Peter Dunne, the Greens’ Russel Norman and Te Ururoa Flavvel from the Maori Party. This is every party on the Privileges Committee except members of Labour First. Note Peter Dunne is a Minister in the Government and the Greens have a co-operation agreement with Labour and the Maori Party abstain on supply and confidence.

They note on the issue of Henry refusing to disclose who suggested Henry approach Glenn for money:

We have received advice that legal professional privilege relates to communications made for the purpose of conveying legal advice and that it does not relate to the identity of a client, particularly when the issue does not relate to the communication of legal advice.

We note that legal professional privilege should not be used as an excuse to withhold information requested by the Privileges Committee, particularly in circumstances where this privilege does not apply.

They make the point that they have required a high standard of proof for their findings, as the allegations are serious – beyond the normal balance of probabilities.

They have determined that there was no debt from Peters to Henry, so no adverse finding there. But they have found the $100,000 constituted a gift as it benefited Peters:

We consider that the payment was of benefit to Mr Peters. Mr Henry’s work on the election petition did not create a direct legal obligation for Mr Peters to pay Mr Henry’s fees. However, Mr Henry told us that Mr Peters “knows that he owes me in the moral sense…”,18 and most clients would acknowledge such a moral obligation to pay a barrister.

A third-party payment to a member’s barrister benefits the member by discharging the moral (and potential legal) obligation to make payment and also by enabling the barrister to provide more assistance to the member in the future. Further, in these particular circumstances the payment contributed to funding an election petition which, if it had been successful, would have been of political benefit to Mr Peters.

They further note:

It is clear that the intent of the donor in this case was not to benefit the barrister. It was the member’s legal expenses that were being contributed to, not the barrister’s wellbeing. Mr Henry’s actions on receipt of Mr Glenn’s money were also unusual. Mr Henry wrote a “pro forma” invoice for GST and income tax purposes. We do not believe this is the normal response of the recipient of a gift. For a GST invoice to have been written, there must have been a taxable supply of services by Mr Henry. The relevant services were received by the member (or his solicitor, Mr Gates, on his behalf).

Together, these elements show clearly that the payment constituted a gift to Mr Peters.

On the issue of whether Peters knew:

The majority of us believe it is extremely unlikely that Mr Peters and Mr Glenn could have had a conversation on that date without the issue of a donation being raised, even if the original contact with Mr Glenn had been by Mr Henry, as claimed by Mr Peters and Mr Henry. The majority of us consider that the sequence of telephone calls followed immediately by an email containing bank account details indicates that the topic must have arisen during one or both of those conversations. It would have assisted our consideration if Mr Peters or Mr Henry had been able to recall more detail of their telephone conversation. Given the evidence before us, the majority of us concluded that Mr Peters had some knowledge of Mr Glenn’s intention to make a donation.

And their conclusion:

The majority of us find that Mr Peters had some knowledge of the $100,000 donation. Further, we find that Mr Peters, having an understanding of the arrangement by which funds were raised by Mr Henry, needed to make an honest attempt to file a correct return. For both these reasons, the majority of us find that a contempt occurred.

The proposed penalty:

Making a false or misleading return is a serious matter, akin to misleading the House. The majority of us therefore recommend that Mr Peters be censured for knowingly providing false or misleading information on a return of pecuniary interests, and ordered to file, within seven days of the House so ordering, amended returns for the years ended 31 January 2006, 2007, and 2008 covering any gifts, debts, or payments in kind that he has not previously registered. We request that the registrar ensure that the amended returns are published, recording that they are made subject to an order of the House.

This could be interesting, as it means any other donation to Peters legal fees, in excess of $500, has to be disclosed – if the House accepts the recommendation.

Now on the part regarding who paid for the $40,000 to Clarkson. is saying that as the cheque was from Wayne Peters’ trust account, he saw this as a reimbursement by Winston personally. Hilarious.

Now onto the letter from the SFO. The Director makes it very clear he got advise on whether to inform the Committee, and he has also bent over backwards to be fair to the donors who paid the $40,000 by redacting their names. He even asks the Privileges Committee not to order him to supply further information, even though he acknowledges a request from the Privileges Committee over-rides the secrecy provisions of the Serious Fraud Act.

The money laundering around the $40,000 is fascinating. Brian Henry did pay the $40,000 but the day before he sent Thompson WIlson (the law firm where two of the Spencer Trustees then worked)  his bank account details.

The Spencer Trust only has $15,400 being left over donations from Donor A. Then Person B (not Winston Peters we are told) lent the Trust $24,600 so they could pay $40,000 to Brian Henry  on 5 April.

Donor A (almpost certainly the Velas) then donated 4 cheques of $9,999 on the 7th of April 2006. Each cheque was from a different subsidiary company.

This allowed Person B’s loan to be repaid on 7 April.

What this means is that Donor A (almost certainly the Velas) personally donated $40,000 to pay off the $40,000 debt Peters owed Clarkson. He has to now declare this on his amended returns.

This raises massive issues relating to the conduct of his portfolios. The whole idea of disclosure is that the transparency it brings to whether Government decisions are affected by donations or gifts to an MP.

So the Minister for Racing in 2006 had Donor A – almost certainly the Velas, pay a $40,000 debt on his behalf. The Velas are multi-millionaires in the racing industry.  And the Minister of Racing convinces the Government – against Treasury advice – to provide lots of money to the racing industry.

Does Helen Clark not think that this gift should have been disclosed as it strikes at the heart of decision making in her Government? And no it is nothing to do with NZ First – this is a personal gift to the Minister of Racing from persons massively affected by the policies he is responsible for in his portfolio.

Helen actually has three decisions to make. They are:

  1. Does she sack Peters as a Minister for breaking the Cabinet Manual and not disclosing a $100,000 gift (let alone the multiple lies Peters has told)
  2. Having the $100,000 gift declared, does she allow Peters to keep it? Probably as it was paid to Henry, not Peters – but here is the big problem for her.
  3. The $40,000 from the Velas (assuming it is them) has to now be filed on the Register by Peters. Clark has to now decide whether she lets him keep the $40,000.

Here is the Cabinet Manual quote from section 2.79:

Ministers who accept gifts worth more than the prescribed value must not only disclose them to the Registrar of Pecuniary Interests of Members of Parliament, but also must relinquish them, unless they obtain the express permission of the Prime Minister to retain them.

So it is clear Helen has to decide whether Peters keeps the $40,000 gift (payment of a debt) from the Velas.

Now how corrupt will she look, if she says it is okay for her Minister of Racing to take and keep $40,000 from a family/company which has benefited hugely from the decisions of the Minister of Racing. He managed to force through millions of dollars of funding of racing prizes, against the advice of Treasury.

Clark has to make a decision on this. Peters has to relinquish the gift unless she gives her express permission he can keep it.

No wonder Winston wanted the SFO evidence suppressed. It was bad enough that NZ First had benefited by huge donations from the Velas, but to have it revealed that Peters personally was gifted $40,000 from them is hugely damaging.

Now it is possible the donations were not from the Velas but read the SFO letter and it looks highly likely. We should know more when Peters does his amended returns.

And as you consider all this, consider what depths the ethical standards of the Clark Government have descended to. Clark condones a Minister who:

  1. breaks the rules of the Register of Pecuniary Interests
  2. breaks the rules of the Cabinet Manual
  3. fails to disclose a $100,000 gift
  4. tells multiple lies about it
  5. gives false evidence to the Privileges Committee
  6. benefits with $100,000 towards his legal fees from a billionaire whom he then lobbies to be made Consul to Monaco
  7. has a $40,000 debt paid off by a company/family that benefits greatly from policy decisions he makes as Minister of Racing
  8. has filed false donation returns to the Electoral Commission

Any one of these should be enough for dismissal arguably. But Clark is keeping him on despite all of the above. Could standards possibly get any lower?

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